Lakeland Economic Development Council calls for 2% hospitality tax to boost city revenue

Sara-Megan Walsh @SaraWalshFL

Wednesday

Jan 22, 2020 at 4:24 PMJan 23, 2020 at 8:21 AM

Steve Scruggs, president of Lakeland Economic Development Council, presented a list of potential revenue sources for city commissioners to pursue in 2020 in order to fund various community development projects, including a 2% tax on prepared food and beverages — including alcohol.

LAKELAND — Lakeland residents could find a new tax tacked onto their restaurant bills if city commissioners support the idea of levying a hospitality tax to support future growth.

Steve Scruggs, president of Lakeland Economic Development Council, presented a list of potential revenue sources for city commissioners to pursue in 2020 in order to fund various community development projects.

“We need to develop new sources of revenue if we want to take it to the next level,” he said.

The commission and city staff have frequently discussed finding ways to drum up additional funds after agreeing in August 2019 to freeze Lakeland Regional Health's lease payments — a source of $14.3 million in revenue each year — and serious concerns about funding local transit improvements.

While former Commissioner Justin Troller believed a city-owned broadband utility could become a future revenue source, the idea has received a lukewarm reception and the commission has otherwise come up empty-handed.

Top among Scrugg's money-producing ideas was for Lakeland to petition Florida legislators for the right to implement a hospitality tax. It would place a 2% fee on all prepared meals and beverages, including alcoholic drinks, beer and wine sold within city limits.

The concept was modeled on a similar tax implemented by Greenville, South Carolina, in 2001.

“That tax generated over $10 million a year for the City of Greenville, it's up to about 11 or 12 [million],” Scruggs said. “If that tax was put in Lakeland we figured it would be $15 million a year.”

Scruggs pointed out the estimated revenue roughly matches the monetary support the city receives annually from the hospital lease. With the lease scheduled to expire in 2040, it could be one option for replacement.

“We would have to talk to other cities about it and get them on board,” he said. “Let's take this to the session and let's get it passed so we can do it in our community.”

LEDC members are also suggesting the city address areas where it's losing funds, according to Scruggs, particularly Cleveland Heights Golf Course. It needed a more than $1.1 million subsidy to stay afloat in 2019, and is predicted to need further support in 2020.

“We need to deal with this issue,” he said. “You could pick up a couple of million per year and use it for something else.”

The LEDC suggested commissioners consider hiring private contractors to operate the public golf course and possibly the RP Funding Center, which receives $3.5 million a year from the city to operate. The golf course could also be turned into a public park that costs less to maintain, according to Scruggs, or its land used for a housing development that would produce property taxes.

Scruggs said the LEDC also wants the city to give more thought to Lake Mirror's development, as it owns 60% of the waterfront. Suggestions included selling Lakeland Electric's administrative offices to a private company to bring it back on the city's tax roll and possibly relocating Lakeland Fire Department Station No. 1, which sits on the lake's northeast corner.

These revenue-producing ideas from LEDC members were aimed at giving the city additional funds to move forward on a number of community development projects. Top among their list was seeing commercial air service brought to Lakeland Linder International Airport, construction of Lakeland Police Department parking garage and the proposed highline, or elevated walkway, along Lake Mirror.

One recommendation for new city developments suggested by LEDC was improving downtown corridors to be more pedestrian and bike friendly. Scruggs said one thought was to eliminate all street-side parking from Kentucky Avenue to extend the sidewalks, allowing for more outside dining along the street that's home to many restaurants and eateries.

“I love a lot of these recommendations,” Mayor Bill Mutz said.

Scruggs emphasized LEDC's extensive list of proposed projects and possible revenue sources were just that, suggestions, for 2020 or future years. He's hopeful to see action.

“I'm not telling you which ones to pick, I'm just saying pick some and we'll get behind you and we'll do it together,” Scruggs said. “Do the right thing, pick some projects and let's make this city great.”

Sara-Megan Walsh can be reached at swalsh@theledger.com or 863-802-7545.

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